EXHIBIT 10.3
Dated the 30th day of August 2000
(1) ROOTMEAD LIMITED
-AND-
(2) BELDRAY LIMITED
-AND-
(3) ▇▇▇▇ INTERNATIONAL (UK) LIMITED
PRE-EMPTION AGREEMENT
in respect of
Land and premises at ▇▇▇▇▇▇ Industrial Estate,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
GOLDSMITHS
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Tel No. ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax No. ▇▇▇▇ ▇▇▇ ▇▇▇▇
Ref: RJB
PRE-EMPTION AGREEMENT
THIS AGREEMENT is made the 30th day of August 2000 BETWEEN (1) ROOTMEAD
LIMITED (Company Registration No. 2129535) whose registered office is at ▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("the Vendor") and (2) BELDRAY LIMITED (Company
Registration No. 62665) whose registered office is at ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ("the Purchaser") and (2) ▇▇▇▇ INTERNATIONAL
(UK) LIMITED (Company Registration No. 516171) whose registered office is at ▇▇
▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ("the Guarantor").
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATIONS
In this agreement the following expressions shall unless the context
otherwise requires have the following meanings respectively:
1.1 "the Property" means the property described in the
first schedule.
1.2 "the Leases" mean the leases of the Property
dated 8 June 1979 and made between
▇▇▇▇▇▇ Industrial Park Limited (1)
the Purchaser (2) and
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Limited (3)
granted for a term of 35 years from
25 March 1979 and registered at HM
Land Registry under Title No.
WM166008 and the reversionary lease
of the Property made today between
the Vendor (1) the Purchaser (2)
and the Guarantor (3) granted for a
term of five years from 25 March
2014 to 24 March 2019
1.3 "the Right of Pre-emption" means the right to purchase the
Property which is exercisable by
the Purchaser in the circumstances
set out in clause 2
1.4 "the Pre-emption Period" means the period from the date of this
agreement until 24 March 2019 or (if
earlier) until the Purchaser shall assign
all of its interest in the Leases or in
either of them or the Leases (or either of
them) shall be forfeited or surrendered or
they shall otherwise cease to exist
1.5 "the Vendor's Notice" means the notice served by the Vendor
pursuant to clause 3
1.6 "the General Conditions" means the Standard Conditions of Sale (3rd
Edition) a copy of which are annexed hereto
1.7 "Working Day" means any day from Monday to Friday
inclusive which is not Christmas Day Good
Friday or a statutory bank holiday and
"Working Days" shall be construed
accordingly.
1.10 words importing one gender shall be construed as importing any other
gender
1.11 words importing the singular shall be construed as importing the plural
and vice versa
1.12 where any part comprises more than one person the obligation and
liabilities of that party under this agreement shall be the joint and
several obligations and liabilities of those persons
1.13 the clause headings do not form part of this agreement and shall not be
taken into account in its construction or interpretation
2
2. AGREEMENT
The Purchaser shall have the right to purchase the Vendor's interest
the Property unencumbered except as mentioned below if the Vendor shall
desire to sell or otherwise dispose of the Property within the
Pre-emption Period.
3. NOTICE OF DESIRE TO SELL
The Vendor shall give written notice to the Purchaser of his desire to
sell or otherwise dispose of the Property by making to the Purchaser an
offer to sell the Property in the form of the agreement marked "A"
annexed to this agreement and the Purchaser shall be at liberty within
21 days of the receipt of such notice to exercise the Right of
Pre-emption on the terms and conditions of this agreement
4. EXERCISE OF RIGHTS OF PRE-EMPTION
4.1 The Right of Pre-emption shall be exercisable by notice in writing to
the Vendor within 21 days from receipt by the Purchaser of the Vendor's
Notice by the Purchaser signing an agreement in the form marked "B"
annexed to this agreement and delivering the same to the Vendor.
4.2 The Vendor and the Purchaser respectively undertake to do all such
other things as may be necessary to ensure that the agreement by which
the Right of Pre-emption is exercised constitutes an enforceable
contract for the sale and purchase of the Property in accordance with
the provision of the Law of Property (Miscellaneous Provisions) ▇▇▇
▇▇▇▇ Section 2
5. FAILURE TO EXERCISE THE RIGHTS OF PRE-EMPTION
5.1 If the Purchaser shall from whatever cause fail to exercise the Right
of Pre-emption in accordance with clause 4.1 the Vendor shall be at
liberty at any time thereafter to sell the Property to a third party
bona fide purchaser at a price being not less than that specified in
the Vendor's Notice
3
5.2 The Purchaser shall upon the completion of any such sale to a third
party bona fide purchaser within a period of six months from the date
of service of the Vendor's Notice cancel or remove the restriction
registered in accordance with clause 14 below
5.3 If the Vendor does not complete a sale to a third party bona fide
purchaser within the six months referred to in clause 5.2 then the
Right of Pre-emption shall continue to apply and the Vendor must in
particular comply with clause 3 in the event of any further proposed
sale
6. COMPLETION
The date for completion of the sale pursuant to the exercise of the
Right of Pre-emption shall unless otherwise agreed in writing be the
first Working Day after the expiration of 4 weeks from the date of the
exercise of the Right of Pre-emption and on completion the Purchaser
shall pay to the Vendor any arrears of rent insurance contributions
service charges or other sums of a similar nature then remaining due to
the Vendor under the terms of the Leases and the tenancy documents
referred to in clause 9
7. DEPOSIT
A deposit of 10% of the purchase price as stated in the Vendor's Notice
shall be paid to the Vendor on the exercise of the Right of Pre-emption
such deposit to be paid to the solicitors acting for the Vendor as
stakeholders by means of telegraphic or other direct transfer banker's
draft or a bank guaranteed cheque or a cheque drawn on a solicitor's
client account
8. CAPACITY
The Vendor shall sell with full title guarantee
4
9. POSSESSION
The Property shall be sold subject to the Leases and to all documents
ancillary or supplemental thereto and to all leases and tenancies
created in respect of the Property (whether before or after today) and
to all documents ancillary or supplemental thereto provided that the
Vendor shall first obtain the consent of the Purchaser to any such
leases and tenancies (and documents ancillary or supplemental thereto)
created after today (such consent not to be unreasonably withheld or
delayed) and the Purchaser shall not be entitled to raise any
requisitions or objections with regard to such matters and the transfer
to the Purchaser shall contain a declaration as to the merger of the
Leases and all other leases and tenancies in respect of the Property in
respect of which the reversion is vested to the Vendor and the term is
vested in the Purchaser as at the completion of the sale pursuant to
the exercise of the Right of Pre-emption.
10. TITLE
The title of the Vendor to the Property has been deduced prior to the
signing of this agreement and the Purchaser shall not be entitled to
raise any requisitions on or objections to it otherwise than in respect
of matters arising or disclosed after the date of this agreement
11. MATTERS AFFECTING THE PROPERTY
The Property is sold subject to and with the benefit of the covenants
rights easements and other matters specified in the second schedule and
the Purchaser shall not be entitled to raise any requisitions or
objections with regard thereto and the transfer to the Purchaser shall
contain the following clauses:
"12.1 The Transferee hereby releases and discharges the Transferor and the
previous landlords under the terms of [the Leases] from all the
covenants, agreements and conditions contained or otherwise arising
under [the Leases] or any deed or document supplemental or ancillary to
them whether past present or future and
5
from all liabilities damages actions proceedings costs claims demands
and expenses arising from such liabilities or otherwise in relation to
the Property
12.2 The Transferee and the Guarantor hereby jointly and severally covenant
with the Transferor to indemnify the Transferor against any liability
arising out of or in connection with the Property or in connection with
any obligation affecting the Property and to perform such obligations.
12.3 Without prejudice to the generality of clause 12.2, the Transferee and
the Guarantor hereby jointly and severally covenant with the Transferor
to observe and perform the covenants on the part of the lessee
contained in the registered lease to title number WM143807 and all
deeds or documents supplemental or ancillary to it and to indemnify the
Transferor against all liabilities damages actions proceedings costs
claims demands and expenses incurred by reason of any breach thereof.
12.4 The Transferor is not liable under any covenant implied in this
transfer by statute for any breach of the terms of the registered lease
concerning the condition of the land comprised in title number
WM143807.
12.5 For the purposes of Section 6(2)(a) of the Law of Property
(Miscellaneous Provisions) ▇▇▇ ▇▇▇▇ all matters now recorded in
registers open to public inspection are to be considered within the
actual knowledge of the Transferee".
12. INCORPORATION OF CONDITIONS OF SALE
The General Conditions shall apply to this agreement so far as they are
applicable to a sale by private treaty and are not varied or
inconsistent with the terms of this agreement and shall be amended as
follows:
12.1 The contract rate of interest is four per cent above the base rate for
the time being of National Westminster Bank PLC
6
12.2 Standard Condition 1.1.1(n) is varied by adding at the end "and each
working day ends at 5.30pm"
12.3 Standard Condition 1.3.6(a) and (b) are varied by adding "unless
returned to the sender undelivered" after "posting"
12.4 Standard Condition 2.2.1 is varied by adding at the end "or by bank
transfer to a bank account stipulated by the seller's solicitor"
12.5 Standard Condition 3.1.2(c) is varied by adding "reasonably be expected
to" after "could not"
12.6 Standard Condition 3.1.2(d) is varied by replacing "those" by
"mortgages and charges protected by such entries in registers"
12.7 Standard Condition 3.1.2 is further varied by adding at the end
"(f) all matters which are, or which are capable of being,
registered as local land charges
(g) all actual or proposed charges, notices, orders, restrictions,
agreements, conditions or other matters arising under the Town
and Country Planning Acts
(h) overriding interests as defined in Land Registration ▇▇▇ ▇▇▇▇
s.70(1) or, in the case of unregistered land, those rights
which would be overriding interests if title were registered"
12.8 Standard Condition 3.1.4 is varied by adding "which he learns about"
after "requirement"
12.9 Standard Condition 4.3.2 and the last thirteen words of Standard
Condition 4.3.1 do not apply
12.10 Standard Condition 4.5.5 does not apply where title to the Property is
registered
7
12.11 Standard Conditions 5.1.1, 5.1.2 and 5.1.4 do not apply
12.12 Standard Condition 5.1.3 is varied by adding at the end "save so far
as required by any lease subject to which the property is sold"
12.13 Standard Condition 5.2.2 is varied by omitting clauses (b), (e) and
(g), and by adding at the end:
"(i) is to comply with all statutory obligations relating to the
property"
12.14 Standard Condition 5.2.3 does not apply
12.15 Standard Condition 5.2.7 is varied by replacing "unaffected" by "waived
from the date the buyer takes occupancy"
12.16 Standard Conditions 6.1.2 and 6.1.3 are varied by replacing "2.00pm"
by "1.00pm" and in Standard Condition 6.2 "received" means the
receipt of cleared funds by a bank nominated by the Seller's Solicitors
12.17 Standard Condition 6.3.2 is varied by replacing "the seller exercises
his option in condition 7.3.4" by "the buyer holds the property as
tenant of the seller or the seller is entitled to compensation under
Condition 7.3"
12.18 Standard Condition 6.4(b) is varied by omitting "or allowed"
12.19 Standard Condition 6.7 is varied by omitting clauses (a) and (b)
12.20 Standard Condition 7.1.1 is varied by replacing "the negotiations
leading to it" by "any written replies by the seller's solicitors to
written inquiries before contract from the buyer's solicitors"
12.21 Standard Condition 7.3.1 is replaced by "If completion is delayed, the
buyer is to pay compensation to the seller for the period from
completion date to actual completion except for any part of that period
for which the delay is attributable to the act or default of the seller
or his mortgagee or Settled Land Act trustee"
8
12.22 Standard Condition 7.3.2 is replaced by "Compensation is calculated
at the contract rate on the purchase price including any separate
price for chattels but less any deposit paid by the buyer"
12.23 Standard Condition 7.3.4 is replaced by "Where condition 7.3.1
applies, the seller is entitled to the income of the property until
actual completion as well as to compensation under that condition"
12.24 Law of Property ▇▇▇ ▇▇▇▇ s.49(2) does not apply
13. RESTRICTION ON ASSIGNMENT AND DISPOSALS BY THE VENDOR
13.1 This agreement is personal to the Purchaser and shall not be capable of
assignment nor shall the Vendor be required to convey or transfer the
Property to anyone other than the Purchaser
13.2 The Vendor shall not sell or otherwise dispose of its interest in the
Property otherwise than in accordance with clause 5.2 unless the
Vendor obtains and delivers to the Purchaser a completed deed of
covenant from the buyer or other party acquiring an interest
confirming that the buyer or other party will observe and perform the
Vendor's obligations in this agreement
14. REGISTRATION
Subject to the Vendor obtaining such consents as are necessary from its
mortgagees and to any charge certificate being put on deposit at H M
Land Registry if a restriction in respect of the Right of Pre-emption
created by this agreement shall not be registered against the titles
to the Property at H M Land Registry within 21 days of the date of this
agreement then this agreement and everything contained in it shall
cease and determine and neither of the parties to it shall have any
right of action whether for damages or otherwise against the other
9
15. GUARANTOR
In consideration of the Vendor entering into this agreement at the
request of the Guarantor, the Guarantor warrants that the Purchaser
will observe and perform the terms of this agreement and agrees to
join in the transfer to the Purchaser to give the covenants to the
Vendor referred to in clause 11 above.
AS WITNESS the of the parties the day and year first above written
FIRST SCHEDULE
The Property
(describe the property)
First all that freehold property to the North West of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ registered at H M Land Registry with Title
Absolute under Title Number WM164707; and
Secondly all that leasehold property to the East of Peascroft Lane, Bilston
aforesaid registered at H M Land Registry with Title Absolute under Title
Number WM143807
SECOND SCHEDULE
Matters affecting the Property
(insert details)
All matters (other than financial charges) contained mentioned or referred to
in H M Land Registry Title Numbers WM164707 and WM143807
ANNEX 1
Agreement A
THIS AGREEMENT is made the ___ day of _________ BETWEEN (1) (person granting
the right of pre-emption) [of (address) or whose registered office is at
(address)] ("the Vendor")
10
and (2) (person to whom the right of pre-emption is granted) [of (address) or
whose registered office is at (address)] ("the Purchaser")
NOW IT IS AGREED as follows:
1. By an agreement ("the Agreement") dated (date) and made between (1) the
Vendor and (2) the Purchaser and the Purchaser was granted a right of
pre-emption ("the Right of Pre-emption") to require the Vendor to sell
the property ("the Property") more particularly described in the
Agreement on the terms and conditions specified in the Agreement.
2. The Vendor offers during the period specified in clause 3 of the
Agreement to sell the Property at the price of (L)____ (____ pounds)
and upon the terms and conditions set out in the Agreement
3. The price matches the offer made to the Vendor by [ ] of [ ]
for the Property a copy of which offer is annexed hereto and the Vendor
warrants that the price is the price offered by a third party bona fide
purchaser
AS WITNESS etc
ANNEX 2
Agreement B
THIS AGREEMENT is made the ___ day of ________ BETWEEN (1) (person granting
the right of pre-emption) [of (address) or whose registered office is at
(address)] ("the Vendor") and (2) (person to whom the right of pre-emption is
granted) [of (address) or whose registered office is at (address)] ("the
Purchaser")
NOW IT IS AGREED as follows:
1. By an agreement ("the Agreement") dated (date) and made between (1) the
Vendor and (2) the Purchaser and the Purchaser was granted a right of
pre-emption ("the Right of Pre-emption") to require the Vendor to sell
the property ("the Property") more
11
particularly described in the Agreement on the terms and conditions
specified in the Agreement.
2. The Vendor has on (date of Vendor's offer) offered to sell the Property
to the Purchaser in the terms set out in clause 3 of this agreement.
3. The Purchaser accepts the offer of the Vendor to sell the Property and
agrees to purchase the same at the price of (L) (___ Pounds) and upon
the terms and conditions set out in the Agreement which shall apply
(mutatis mutandis) as if the same had been repeated in this agreement.
AS WITNESS etc.
SIGNED on behalf of the
Purchaser by: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
SIGNED on behalf of the
Guarantor by: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
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STANDARD CONDITIONS OF SALE (THIRD EDITION)
(NATIONAL CONDITIONS OF SALE 23RD EDITION,
LAW SOCIETY'S CONDITIONS OF SALE 1995)
---------------
1. GENERAL
1.1 DEFINITIONS
1.1.1 In these conditions:
(a) "accrued interest" means:
(i) if money has been placed on deposit or in a building
society share account, the interest actually earned
(ii) otherwise, the interest which might reasonably have
been earned by depositing the money at interest on
seven days' notice of withdrawal with a clearing bank
less, in either case, any proper charges for handling the
money
(b) "agreement" means the contractual document which incorporates
these conditions, with or without amendment
(c) "banker's draft" means a draft drawn by and on a clearing
bank
(d) "clearing bank" means a bank which is a member of CHAPS
Limited
(e) "completion date", unless defined in the agreement, has the
meaning given in condition 6.1.1
(f) "contract" means the bargain between the seller and the
buyer of which these conditions, with or without amendment,
form part
(g) "contract rate", unless defined in the agreement, is the Law
Society's interest rate from time to time in force
(h) "lease" includes sub-lease, tenancy and agreement for a lease
or sub-lease
(i) "notice to complete" means a notice requiring completion of
the contract in accordance with condition 6
(j) "public requirement" means any notice, order or proposal given
or made (whether before or after the date of the contract) by
a body acting on statutory authority
(k) "requisition" includes objection
(l) "solicitor" includes barrister, duly certificated notary
public, recognised licensed conveyancer and recognised
body under sections 9 or 32 of the Administration of
Justice ▇▇▇ ▇▇▇▇
(m) "transfer" includes conveyance and assignment
(n) "working day" means any day from Monday to Friday (inclusive)
which is not Christmas Day, Good Friday or a statutory
Bank Holiday
1.1.2 When used in these conditions the terms "absolute title" and
"office copies" have the special meanings given to them by the
Land Registration ▇▇▇ ▇▇▇▇.
1.2 JOINT PARTIES
there is more than one seller or more than one buyer, the
obligations which by undertake can be enforced against them
all jointly or against each individually.
1.3 NOTICES AND DOCUMENTS
1.3.1 A notice required or authorised by the contract must be
in writing.
1.3.2 Giving a notice or delivering a document to a party's solicitor has the
same effect as giving or delivering it to that party.
1.3.3 Transmission by fax is a valid means of giving a notice or delivering a
document where delivery of the original document is not essential.
1.3.4 Subject to conditions 1.3.5 to 1.3.7, a notice is given and a document
delivered when it is received.
1.3.5 If a notice or document is received after 4.00pm on a working day, or
on a day which is not a working day, it is to be treated as having been
received on the next working day.
1.3.6 Unless the actual time of receipt is proved, a notice or document sent
by the following means is to be treated as having been received before
4.00pm on the day shown below:
(a) by first-class post: two working days after posting
(b) by second-class post: three working days after posting
(c) through a document exchange: on the first working day after the
day on which it would normally
be available for collection by the
addressee.
1.3.7 Where a notice or document is sent through a document exchange, then
for the purposes of condition 1.3.6 the actual time of receipt is:
(a) the time when the addressee collects it from the document
exchange or, if earlier
(b) 8:00am on the first working day on which it is available for
collection at that time.
1.4 VAT
1.4.1 An obligation to pay money includes an obligation to pay any value
added tax chargeable in respect of that payment.
1.4.2 All sums made payable by the contract are exclusive of value added tax.
2. FORMATION
2.1 Date
2.1.1 If the parties intend to make a contract by exchanging duplicate
copies by post or through a document exchange, the contract is made
when the last copy is posted or deposited at the document exchange.
2.1.2 If the parties' solicitors agree to treat exchange as taking place
before duplicate copies are actually exchanged, the contract is made
as so agreed.
2.2 DEPOSIT
2.2.1 The buyer is to pay or send a deposit of 10 per cent of the purchase
price no later than the date of the contract. Except on a sale by
auction, payment is to be made by banker's draft or by a cheque drawn
on a solicitors' clearing bank account.
2.2.2 If before completion date the seller agrees to buy another property in
England and Wales for his residence, he may use all or any part of the
deposit as a deposit in that transaction to be held on terms to the
same effect as this condition and condition 2.2.3.
2.2.3 Any deposit or part of a deposit not being used in accordance with
condition 2.2.2 is to be held by the seller's solicitor as stakeholder
on terms that on completion it is paid to the seller with accrued
interest.
2.2.4 If a cheque tendered in payment of all or part of the deposit is
dishonoured when first presented, the seller may, within seven working
days of being notified that the cheque has been dishonoured, give
notice to the buyer that the contract is discharged by the buyer's
breach.
2.3 AUCTIONS
2.3.1 On a sale by auction the following conditions apply to the property
and, if it is sold in lots, to each lot.
2.3.2 The sale is subject to a reserve price.
2.3.3 The seller, or a person on his behalf, may bid up to the reserve price.
2.3.4 The auctioneer may refuse any bid.
2.3.5 If there is a dispute about a bid, the auctioneer may resolve the
dispute or restart the auction at the last undisputed bid.
3. MATTERS AFFECTING THE PROPERTY
3.1 FREEDOM FROM INCUMBRANCES
3.1.1 The seller is selling the property free from incumbrances, other than
those mentioned in condition 3.1.2.
3.1.2 The incumbrances subject to which the property is sold are:
(a) those mentioned in the agreement
(b) those discoverable by inspection of the property before the
contract
(c) those the seller does not and could not know about
(d) entries made before the date of the contract in any public
register except those maintained by HM Land Registry or its
Land Charges Department or by Companies House
(e) public requirements.
3.1.3 After the contract is made, the seller is to give the buyer written
details without delay of any new public requirement and of anything in
writing which he learned about concerning any incumbrances subject to
which the property is sold.
3.1.4 The buyer is to bear the cost of complying with any outstanding public
requirement and is to indemnify the seller against any liability
resulting from a public requirement.
3.2 PHYSICAL STATE
3.2.1 The buyer accepts the property in the physical state it is in at the
date of the contract unless the seller is building or converting it.
3.2.2 A leasehold property is sold subject to any subsisting breach of a
condition of tenant's obligation relating to the physical state of the
property which renders the lease liable to forfeiture.
3.2.3 A sub-lease is granted subject to any subsisting breach of a condition
or tenant's obligation relating to the physical state of the property
which renders the seller's own lease liable to forfeiture.
3.3 LEASES AFFECTING THE PROPERTY
3.3.1 The following provisions apply if the agreement states that any part
of the property is sold subject to a lease.
3.3.2 (a) The seller having provided the buyer with full details of each
lease or copies of the documents embodying the lease terms,
the buyer is treated as entering into the contract knowing
and fully accepting those terms
(b) The seller is to inform the buyer without delay if the lease
ends or if the seller learns of any application by the tenant
in connection with the lease; the seller is then to act as
the buyer reasonably directs, and the buyer is to indemnify
him against all consequent loss and expense
(c) The seller is not to agree to any proposal to change the
lease terms without the consent of the buyer and is to inform
the buyer without delay of any change which may be proposed
or agreed
(d) The buyer is to indemnify the seller against all claims
arising from the lease after actual completion; this includes
claims which are unenforceable against a buyer for want of
registration
(e) The seller takes no responsibility for what rent is lawfully
recoverable, nor for whether or how any legislation affects
the lease
(f) If the let land is not wholly within the property, the seller
may apportion the rent.
3.4 RETAINED LAND
3.4.1 The following provisions apply where after the transfer the seller
will be retaining land near the property.
3.4.2 The buyer will have no right of light or air over the retained land,
but otherwise the seller and the buyer will each have the rights over
the land of the other which they would have had if they were two
separate buyers to whom the seller has made simultaneous transfers of
the property and the retained land.
3.4.3 Either party may require that the transfer contain appropriate express
terms.
4. TITLE AND TRANSFER
4.1 TIMETABLE
4.1.1 The following are the steps for deducing and investigating the title to
the property to be taken within the following time limits:
STEP TIME LIMIT
---- ----------
1. The seller is to send the Immediately after making the contract
buyer evidence of title in
accordance with condition 4.2
2. The buyer may raise written Six working days after either the date
requisitions of the contract or the date of delivery
of the seller's evidence of title on
which the requisitions are raised
whichever is the later
3. The seller is to reply in writing Four working days after receiving the
to any requisitions raised requisitions
4. The buyer may make written Three working days after receiving the
observations on the seller's replies
replies
The time limit on the buyer's right to raise requisitions applies even
where the seller supplies incomplete evidence of his title, but the
buyer may, within six working days from delivery of any further
evidence, raise further requisitions resulting from that evidence. On
the expiry of the relevant time limit the buyer loses his right to
raise requisitions or make observations.
4.1.2 The parties are to take the following steps to prepare and agree the
transfer of the property within the following time limits:
STEP TIME LIMIT
---- ----------
A. The buyer is to send the At least twelve working days before
seller a draft transfer completion date
B. The seller is to approve or Four working days after delivery of the
revise that draft and either draft transfer
return it or retain it for use as
the actual transfer
C. If the draft is returned the At least five working days before
buyer is to send an completion date
engrossment to the seller
4.1.3 Periods of time under conditions 4.1.1 and 4.1.2 may run concurrently.
4.1.4 If the period between the date of the contract and completion date is
less than 15 working days, the time limits in conditions 4.1.1 and
4.1.2 are to be reduced by the same proportion as that period bears to
the period of 15 working days. Fractions of a working day are to be
rounded down except that the time limit to perform any step is not to
be less than one working day.
4.2 PROOF OF TITLE
4.2.1 The evidence of registered title is office copies of the items required
to be furnished by section 110(1) of the Land Registration Act 1925 and
the copies abstracts and evidence referred to in section 110(2).
4.2.2 The evidence of unregistered title is an abstract of the title, or an
epitome of title with photocopies of the relevant documents.
4.2.3 Where the title to the property is unregistered, the seller is to
produce to the buyer (without cost to the buyer):
(a) the original of every relevant document, or
(b) an abstract, epitome or copy with an original marking by a
solicitor or examination either against the original or
against an examined abstract or against an examined copy.
4.3 DEFINING THE PROPERTY
4.3.1 The seller need not:
(a) prove the exact boundaries of the property
(b) prove who owns fences, ditches, ▇▇▇▇▇▇ or walls
(c) separately identify parts of the property with different
titles further than he may be able to do from information in
his possession.
4.3.2 The buyer may, if it is reasonable, require the seller to make or
obtain, pay for and hand over a statutory declaration about facts
relevant to the matters mentioned in condition 4.3.1. The form of the
declaration is to be agreed by the buyer, who must not unreasonably
withhold his agreement.
4.4 RENTS AND RENTCHARGES
The fact that a rent or rentcharge, whether payable or receivable by
the owner of the property, has been or will on completion be,
informally apportioned is not to be regarded as a defect in title.
4.5 TRANSFER
4.5.1 The buyer does not prejudice his right to raise requisitions, or to
require replies to any raised, by taking any steps in relation to the
preparation or agreement of the transfer.
4.5.2 If the agreement makes no provision as to title guarantee, then
subject to condition 4.5.3 the seller is to transfer the property with
full title guarantee.
4.5.3 The transfer is to have effect as if the disposition is expressly made
subject to all matters to which the property is sold subject under the
terms of the contract.
4.5.4 If after completion the seller will remain bound by any obligation
affecting the property, but the law does not imply any covenant by the
buyer to indemnify the seller against liability for future breaches of
it:
(a) the buyer is to covenant in the transfer to indemnify the
seller against liability for any future breach of the
obligation and to perform it from then on, and
(b) if required by the seller, the buyer is to execute and
deliver to the seller on completion a duplicate transfer
prepared by the buyer.
4.5.5 The seller is to arrange at his expense that, in relation to every
document of title which the buyer does not receive on completion, the
buyer is to have the benefit of:
(a) a written acknowledgement of his right to its production, and
(b) a written undertaking for its safe custody (except while it
is held by a mortgagee or by someone in a fiduciary capacity).
5. PENDING COMPLETION
5.1 RESPONSIBILITY FOR PROPERTY
5.1.1 The seller will transfer the property in the same physical state as it
was at the date of the contract (except for fair wear and tear), which
means that the seller retains the risk until completion.
5.1.2 If at any time before completion the physical state of the property
makes it unusable for its purpose at the date of the contract:
(a) the buyer may rescind the contract
(b) the seller may rescind the contract where the property has
become unusable for that purpose as a result of damage
against which the seller could not reasonably have insured,
or which it is not legally possible for the seller to make
good.
5.1.3 The seller is under no obligation to the buyer to insure the property.
5.1.4 Section 47 of the Law of Property ▇▇▇ ▇▇▇▇ does not apply.
5.2 OCCUPATION BY BUYER
5.2.1 If the buyer is not already lawfully in the property, and the seller
agrees to let him into occupation, the buyer occupies on the following
terms.
5.2.2 The buyer is a licensee and not a tenant. The terms of the licence
are that the buyer:
(a) cannot transfer it
(b) may permit members of his household to occupy the property
(c) is to pay or indemnify the seller against all outgoings and
other expenses in respect of the property
(d) is to pay the seller a fee calculated at the contract rate on
the purchase price (less any deposit paid) for the period of
the licence
(e) is entitled to any rents and profits from any part of the
property which he does not occupy
(f) is to keep the property in as good a state of repair as it
was in when he went into occupation (except for fair wear and
tear) and is not to alter it
(g) is to insure the property in a sum which is not less than the
purchase price against all risks in respect of which
comparable premises are normally insured
(h) is to quit the property when the licence ends.
5.2.3 On the creation of the buyer's licence, condition 5.1 ceases to apply,
which means that the buyer then assumes the risk until completion.
5.2.4 The buyer is not in occupation for the purposes of this condition if
he merely exercises rights of access given solely to do work agreed by
the seller.
5.2.5 The buyer's licence ends on the earliest of: completion date,
rescission of the contract or when five working days' notice given by
one party to the other takes effect.
5.2.6 If the buyer is in occupation of the property after his licence has
come to an end and the contract is subsequently completed he is to
pay the seller compensation for his continued occupation calculated at
the same rate as the fee mentioned in condition 5.2.2(d).
5.2.7 The buyer's right to raise requisitions is unaffected.
6. COMPLETION
6.1 DATE
6.1.1 Completion date is twenty working days after the date of the contract
but time is not of the essence of the contract unless a notice to
complete has been served.
6.1.2 If the money due on completion is received after 2:00pm, completion
is to be treated, for the purposes only of conditions 6.3 and 7.3, as
taking place on the next working day.
6.1.3 Condition 6.1.2 does not apply where the sale is with vacant
possession of the property or any part and the seller has not vacated
the property or that part by 2:00pm on the date of actual completion.
6.2 PLACE
Completion is to take place in England and Wales, either at the
seller's solicitor's office or at some other place which the seller
reasonably specifies.
6.3 APPORTIONMENTS
6.3.1 Income and outgoings of the property are to be apportioned between the
parties so far as the change of ownership on completion will affect
entitlement to receive or liability to pay them.
6.3.2 If the whole property is sold with vacant possession or the seller
exercises his option in condition 7.3.4, apportionment is to be made
with effect from the date of actual completion; otherwise, it is to be
made from completion date.
6.3.3 In apportioning any sum, it is to be assumed that the seller owns the
property until the end of the day from which apportionment is made and
that the sum accrues from day to day at the rate at which it is
payable on that day.
6.3.4 For the purpose of apportioning income and outgoings, it is to be
assumed that they accrue at an equal daily rate throughout the year.
6.3.5 When a sum to be apportioned is not known or easily ascertainable at
completion, a provisional apportionment is to be made according to the
best estimate available. As soon as the amount is known, a final
apportionment is to be made and notified to the other party. Any
resulting balance is to be paid no more than ten working days later,
and if not then paid the balance is to bear interest at the contract
rate from then until payment.
6.3.6 Compensation payable under condition 5.2.6 is not to be apportioned.
6.4 AMOUNT PAYABLE
The amount payable by the buyer on completion is the purchase price
(less any deposit already paid to the seller or his agent) adjusted to
take account of:
(a) apportionments made under condition 6.3
(b) any compensation to be paid or allowed under condition 7.3.
6.5 TITLE DEEDS
6.5.1 The seller is not to retain the documents of title after the buyer has
tendered the amount payable under condition 6.4.
6.5.2 Condition 6.5.1 does not apply to any documents of title relating to
land being retained by the seller after completion.
6.6 RENT RECEIPTS
The buyer is to assume that whoever gave any receipt for a payment of
rent or service charge which the seller produces was the person or the
agent of the person then entitled to that rent or service charge.
6.7 MEANS OF PAYMENT
The buyer is to pay the money due on completion in one or more of the
following ways:
(a) legal tender
(b) a banker's draft
(c) a direct credit to a bank account nominated by the seller's
solicitor
(d) an unconditional release of a deposit held by a stakeholder.
6.8 NOTICE TO COMPLETE
6.8.1 At any time on or after completion date, a party who is ready able and
willing to complete may give the other a notice to complete.
6.8.2 A party is ready able and willing:
(a) if he could be, but for the default of the other party, and
(b) in the case of the seller, even though, a mortgage remains
secured on the property, if the amount to be paid on
completion enables the property to be transferred freed of
all mortgages (except those to which the sale is expressly
subject).
6.8.3 The parties are to complete the contract within ten working days of
giving a notice to complete, excluding the day on which the notice is
given. For this purpose, time is of the essence of the contract.
6.8.4 On receipt of a notice to complete:
(a) if the buyer paid no deposit, he is forthwith to pay a
deposit of 10 per cent
(b) if the buyer paid a deposit of less than 10 per cent, he is
forthwith to pay a further deposit equal to the balance of
that 10 per cent.
7. REMEDIES
7.1 ERRORS AND OMISSIONS
7.1.1 If any plan or statement in the contract, or in the negotiations
leading to it, is or was misleading or inaccurate due to an error or
omission, the remedies available are as follows.
7.1.2 When there is a material difference between the description or value
of the property as represented and as it is, the injured party is
entitled to damages.
7.1.3 An error or omission only entities the injured party to rescind the
contract:
(a) where it results from fraud or recklessness, or
(b) where he would be obliged, to his prejudice, to transfer or
accept property differing substantially (in quantity, quality
or tenure) from what the error or omission had led him to
expect.
7.2 RESCISSION
If either party rescinds the contract:
(a) unless the rescission is a result of the buyer's breach of
contract the deposit is to be repaid to the buyer with accrued
interest
(b) the buyer is to return any documents he received from the
seller and is to cancel any registration of the contract.
7.3 LATE COMPLETION
7.3.1 If there is default by either or both of the parties in performing
their obligations under the contract and completion is delayed, the
party whose total period of default is the greater is to pay
compensation to the other party.
7.3.2 Compensation is calculated at the contract rate on the purchase price,
or (where the buyer is the paying party) the purchase price less any
deposit paid, for the period by which the paying party's default
exceeds that of the receiving party, or, if shorter, the period between
completion date and actual completion.
7.3.3 Any claim for loss resulting from delayed completion is to be reduced
by any compensation paid under this contract.
7.3.4 Where the buyer holds the property as tenant of the seller and
completion is delayed, the seller may give notice to the buyer, before
the date of actual completion, that he intends to take the net income
from the property until completion. If he does so, he cannot claim
compensation under condition 7.3.1 as well.
7.4 AFTER COMPLETION
Completion does not cancel liability to perform any outstanding
obligation under this contract.
7.5 BUYER'S FAILURE TO COMPLY WITH NOTICE TO COMPLETE
7.5.1 If the buyer fails to complete in accordance with a notice to
complete, the following terms apply.
7.5.2 The seller may rescind the contract, and if he does so:
(a) he may
(i) forfeit and keep any deposit and accrued interest
(ii) resell the property
(iii) claim damages
(b) the buyer is to return any documents he received from the
seller and is to cancel any registration of the contract.
7.5.3 The seller retains his other rights and remedies.
7.6 SELLER'S FAILURE TO COMPLY WITH NOTICE TO COMPLETE
7.6.1 If the seller fails to complete in accordance with a notice to
complete, the following terms apply.
7.6.2 The buyer may rescind the contract, and if he does so:
(a) the deposit is to be repaid to the buyer with accrued interest
(b) the buyer is to return any documents he received from the
seller and is, at the seller's expense, to cancel any
registration of the contract.
7.6.3 The buyer retains his other rights and remedies.
8. LEASEHOLD PROPERTY
8.1 EXISTING LEASES
8.1.1 The following provisions apply to a sale of leasehold land.
8.1.2 The seller having provided the buyer with copies of the documents
embodying the lease terms, the buyer is treated as entering into the
contract knowing and fully accepting those terms.
8.1.3 The seller is to comply with any lease obligations requiring the tenant
to insure the property.
8.2 NEW LEASES
8.2.1 The following provisions apply to a grant of a new lease.
8.2.2 The conditions apply so that:
"seller" means the proposed landlord
"buyer" means the proposed tenant
"purchase price" means the premium to be paid on the grant of a lease.
8.2.3 The lease is to be in the form of the draft attached to the agreement.
8.2.4 If the term of the new lease will exceed 21 years, the seller is to
deduce a title which will enable the buyer to register the lease at HM
Land Registry with an absolute title.
8.2.5 The buyer is not entitled to transfer the benefit of the contract.
8.2.6 The seller is to engross the lease and a counterpart of it and is to
send the counterpart to the buyer at least five working days before
completion date.
8.2.7 The buyer is to execute the counterpart and deliver it to the seller on
completion.
8.3 LANDLORD'S CONSENT
8.3.1 The following provisions apply if a consent to assign or sub-let is
required to complete the contract.
8.3.2 (a) The seller is to apply for the consent at his expense, and to
use all reasonable efforts to obtain it
(b) The buyer is to provide all information and references
reasonably required.
8.3.3 The buyer is not entitled to transfer the benefit of the contract.
8.3.4 Unless he is in breach of his obligation under condition 8.3.2, either
party may rescind the contract by notice to the other party if three
working days before completion date:
(a) the consent has not been given or
(b) the consent has been given subject to a condition to which the
buyer reasonably objects.
In that case, neither party is to be treated as in breach of contract
and condition 7.2 applies.
9. CHATTELS
9.1 The following provisions apply to any chattels which are to be sold.
9.2 Whether or not a separate price is to be paid for the chattels, the
contract takes effect as a contract for sale of goods.
9.3 Ownership of the chattels passes to the buyer on actual completion.
